June 2017

Home Care is the primary reason for social care Delayed Transfers of care and the most fragile part of the social care market. Some providers are running with sustainable profits but many with losses or on the verge of being unsustainable. ADASS, CQC and others are most concerned about this aspect of the care market. The October 2016 Snap Survey of Directors of Adult Social Services found that 54 councils (42%) had experienced the closure of one or more home care provider in their area in the previous six months, and 74 councils (57%) had home care providers hand back contracts in the same period.

DASSs have all been balancing the responsibilities to develop and arrange high quality care and giving people choice and control with the necessity to make significant savings in budgets. price, workforce, quality and sustainability. This balance is ever harder to achieve and therefore the viability of contracts becomes key. If you can, look to the longer term and accept that the £1bn put into IBCF this year gives key opportunities to demonstrate that investing in ASC can make a difference to the key areas that concern NHSE and government in relation to DToCs. Try to spend the money in ways that are on Adult Social Care, on market sustainability and on reducing DToCs.

To that end, here is a checklist of top tops:

  1. Your providers (and people arranging services with Direct Payments) must pay the National Living Wage, travel time (which will be significantly higher in rural areas), sleep in hours, for training, supervision, rostering, quality assurance and ensure that carers are enrolled for pensions etc. You should be aware of what this costs. There are benchmarks readily available. Use as many open book exercises as you can.
  2. Use the tools available and commissioned for the Care Act: DH commissioned Working with Care Providers to understand costs[1] and Assessing social care market and provider sustainability Part A: A guide for local authorities[2] together with Commissioning for Better Outcomes[3].
  3. There has been some stabilisation of the market over the last six months with some providers handing back contracts that they run with losses in order to make their overall business viable. But ongoing closures, handbacks and unavailability (and businesses being sold for £1), indicate that this is still not the case everywhere. Check that providers are running with profits not losses (via Companies House) and seek intelligence of non-viability, such as paying wages late. Do not perpetuate unsustainability by accepting bids (or consenting to others accepting bids) that quite clearly do not enable providers to meet their responsibilities and costs.
  4. Look at the providers in your area and particularly at those with whom you have a portfolio of contracts. Start with looking at what you pay and at the benchmarks and understand if it is really sustainable to pay below those benchmarks. Some providers are able to take on contracts at marginal rates because other parts of their business mean it works for them.  Others can make it work because they are charities or family businesses. Think of how diversified businesses are; for example, some major providers have completely other business streams that enable them to continue with contracts.
  5. Understand that failure has costs; some of these are financial, in terms of re-tendering and additional price, some relate to wellbeing and safeguarding. Lateness and visit cramming causes physical harm, pain and discomfort to very frail people, and anxiety and distress to everyone. It can cause understandable behavioural challenges for people with dementia or learning disabilities.
  6. A significant proportion of providers that are rated ‘good’ by CQC, were offered by councils, and agreed to take on, significant increases in contract size last year at marginal cost and failed as a result. They became ‘inadequate’, ‘requires improvement’ or left the market. Growth needs to be at a managed pace; understand this and attempt to support managed growth.
  7. Some areas of the country have high employment rates and high cost of living. For these areas, benchmarks based on the National Living Wage may be Think about your approach to procurement and whether this is helping providers in both securing necessary good quality staff and a ready supply of service. A number of Councils use block contracts or a blend of block and spot (‘cost and volume’) contracting along with multiple year contracts to provide a level of security about income and rates.
  8. The greatest constraint facing the market is the recruitment and retention of high quality motivated staff. Work with providers and local recruitment and training agencies to encourage local people to consider a career in social care. Look at providers’ workforces including training, turnover and absences. Are you paying enough to ensure sufficient quality? Where contracts are in rural areas, consider innovative approaches / additional resource to support providers to meet requirements, e.g. additional travel time, ‘rural uplift’ payments for visits or higher rural rates.  Provider partnerships could also be considered. Where domiciliary providers are unable to cover packages, consider options for PA’s alongside direct payments teams etc.  In rural areas, potential employees may be unwilling to seek employment as a home care worker but perhaps would consider acting as a flexible PA locally, within their own community. 
  9. A vibrant market requires diversity. Once stabilised, try to increase the number of providers in your area and balance this with any zoning you may be arranging. Try not to restrict the number of providers and be careful not to make contract terms so tight that they become unattractive to new entrants. Don’t go too narrow and don’t be seduced by notions that larger providers are likely to be more stable: some large home care organisations are operating with low profit.
  10. Where contract handbacks have happened and new providers come in and accept the same rates, scrutinise that too. Why can they do what the others can’t? What are they doing that’s different?



[1] http://www.cipfa.org/policy-and-guidance/reports/working-with-care-providers-to-understand-costs

[2] http://www.cordisbright.co.uk/admin/resources/market-sustainability.zip

[3] https://www.local.gov.uk/sites/default/files/documents/commissioning-better-outc-bb6.pdf